Market Milestones: Bull Switch

[Image] Good morning , We made it through another week of blisteringly bullish price action. I don’t know about you, but I was beginning to think that the market does not only go up. Luckily, it seems that July 19th through August 18th was just a glitch in the up only technology that is the Nasdaq. I heard from a little birdie in my imagination that everything is controlled by a “Bull or Bear” switch in the President of Money, Jerome Powell’s office. Maybe the cleaners or an assistant accidently clicked us over into bear mode for a month but luckily someone noticed and flipped us back into bull stampede mode. We have been watching for a nice buyable dip since May and we are finally getting it. The QQQ pulled down into the exact pocket of liquidity that we were watching, but the SPY didn’t quite get there. For that reason, it’s possible that one more low, or double bottom is still on the table before higher highs are made. The additional move down lines up very nicely with an ABC corrective wave that makes up the larger 4th wave. It would also line up with the historically bearish lean that September holds for the markets. QQQ finishes the month of September positive only 46% of the time. The only worse month is February at 42%. The SPY finishes September positive only 50% of the time, which is the lowest of any month of the year. [Image] [Image] Now that we have taken out and closed strongly above last Thursday’s bearish candle, the bulls should remain in the control just so long as Tuesday’s candle holds. If Tuesday’s candle breaks, the ABC corrective wave count will be my primary count. The DIA sold off nicely showing divergence from the QQQ and proving again that the tech sector is leading the bullish charge. If Tuesday’s candle holds against whatever retest comes in, I will assume that the low is in and that new highs are just around the corner, seasonality be darned. From a sentiment perspective one more low would be very interesting. There are so many people calling for the top of the market and end of the world right now. There are grizzly bears everywhere eating their salmon, buying their puts, and biding their time. After all bad economic news is only good economic news for so long, until it’s just bad economic news. If you missed it, we went over the markets bearish chart patterns in last week’s newsletter. If the markets drop to a new low from here, the bulls get stopped out, fear spikes and the shorts get in heavy. This will provide the perfect opportunity for the big money bulls to buy that liquidity, trap the bears and power to new highs. Either that or the market really does crash. But hey, as long as a plan is followed, risk is managed and downside is mitigated, everything should be alright. QQQ [Image]( SPY [Image]( DIA [Image]( ETF of the Week Today’s EFF of the week is iShares Inc MSCI Brazil ETF (EWZ). This chart is super gappy, gap happy one might say. The cool thing about the gaps on any chart is they are a draw on price and liquidity and they often fill. That is especially true for the EWZ chart over the last few years, it fills gaps like that is its full-time job. There are two prominent gaps on the chart that have yet to fill. One bearish retest gap was created on Thursday, as in yesterday, and one was created June 2nd and is a bullish retest gap. If Thursday’s gap can fill, or at least retest, that could give a great short entry with a target of the June 2nd gap fill. It would also be creating a nice head and shoulders pattern and could be in the bearish C wave of a larger correction. EWZ [Image]( Strive On, Yates Craig, RLT & TPN Market Analyst Disclosure: You are responsible for your own trading decisions. ALWAYS, do your own research before investing in any of the above securities. This is not a solicitation to buy/sell ETFs or securities. NEVER invest money in ETFs or stocks that you can't afford to lose. You can lose all of your capital by trading any securities mentioned. These ETFs/securities are very volatile and gain and lose value quickly. We reserve the right to freely trade in any mentioned ETFs or securities. We are not compensated by any mentioned companies. We trade ETFs and securities based on our opinion of intrinsic/possible future value only. We are not registered investment advisors, so always do your own research before buying any securities. Unable to view? Read it [online]( If you no longer wish to receive mail from us, you can [unsubscribe]( Sent from: Real Life Trading in Nashville TN 37221